Is it Miller's Time?

Both companies
are tight-lipped about what’s in store for the future MillerCoors, but
it’s apparent that two corporate headquarters will merge in one
location, a process that will match Milwaukee in a corporate beauty
contest with picturesque Goldenor even another location. Two weeks ago
Coors head Peter Coors hinted that a third city could land the prize,
leaving both Wisconsin and Colorado crying in their respective beers.

To
those jaded by the loss of Pabst, Schlitz and Blatz, the song may sound
familiar. But the reality, say local business leaders, is far from
grim. First, there are no plans to move brewing operations out of the
city. Second, the new joint venture, they say, will better position
Miller Brewing to compete with industry heavyweight Anheuser-Busch.
What’s more, it is hoped that a strong MillerCoors will lead to greater
brewing capacity and more manufacturing jobs in Miller Valley.

Miller
spokesman Julian Green further assures the skeptics that Miller remains
committed to Milwaukee’s civic life, even if the new headquartersor
the “joint venture center” (JVC)is not sited here.

“Regardless
of where the JVC is located, the company will remain engaged in its
corporate social investments,” Green said.

Miller Brewing is a major
supporter of the Milwaukee County Zoo, Summerfest, lakefront ethnic
festivals and all three of Wisconsin’s major league sports teams.

Coors
Brewing Co. is owned by Molson Coors, which splits its own headquarters
between Colorado and Montreal. Miller Brewing is owned by SABMiller,
based in London. Miller hasn’t been locally controlled in more than 40
years, when W.R. Grace Co. bought out the family stock and Philip
Morris Inc. purchased it a few years later. Miller’s corporate
headquarters at 3939 W. Highland Blvd. on the city’s near West
Side currently employs about 900 people.

But no decision regarding job
cuts or corporate structure can be final until after the proposed
partnership is reviewed and approved by the U.S. Department of Justice
(DOJ), a decision not expected until this summer.

“Until the DOJ clears
the joint venture, it would be premature,” Green said.

Impact on Jobs

Chicago,
Dallas and other cities are also reportedly thirsting for MillerCoors,
a scenario that some business leaders minimize.

“I don’t see us losing
all 900 jobs or close to that,” said Pat O’Brien, executive director of
Milwaukee 7, which promotes business in the region. “While there are
synergies in co-locating certain functions, it is also difficult and
expensive to move existing staff or hire and train new staff. I would
expect some of the back office functions to stay, whether the corporate
HQ is located here or not.”

Those back office functions
include personnel, IT support, accounting and purchasing. Still, the
company will be reducing “redundancies” where possible. MillerCoors is
relying on job reductions, plus other efficiencies, for an estimated
$500 million annual savings, according to press statements released by
MillerCoors.

“Certainly, Milwaukee will lose some jobs and
some types of jobs in the short term and possibly forever,” O’Brien
said. “But remember, the whole idea of the combination is to make
Miller stronger vis-a-vis their competition, primarily Bud, and this
combination should do that. Hopefully the end result is to increase
production and jobs both at the local brewery and in the other
functions that remain in Milwaukee.”

Far more damaging than
any potential loss of jobs, though, will be the blow to the city’s
image as a friendly home for large companies. Milwaukee is fifth in the
nation in the number of Fortune 500 corporations per capita, nestled
between Cincinnati and Detroit.

“We punch way above our weight
class,” said Tim Sheehy, president of the Metropolitan Milwaukee
Association of Commerce (MMAC). “That’s a good indicator that this is a
good place to do business.”

Though Miller Brewing Co. is not a Fortune
500 company because it is not publicly traded, its annual revenue of
just less than $12 billion is nearly as great as Kohl’s Corp., the
region’s fourth-largest company on the Fortune list.

Any job losses
could also have an impact on the city’s identity as the home of great
breweries.

“Miller has a place in the heart of Milwaukee
because of our history as a brewing town,” said Eileen Force,
spokeswoman for Milwaukee Mayor Tom Barrett, who has joined the charge
with Gov. Jim Doyle to keep the headquarters here. “Attracting jobs and
retaining companies is a top priority for the mayor.”

Force
echoed business leaders who say the joint venture is likely to create
more jobs, not less.

“Under the [joint venture] scenario, the brewery
operations are likely to grow,” she said. “The partnership aims to feed
off the efficiencies of the two companies, so we may be brewing Coors
products in Milwaukee as well.”

Milwaukee 7 (M7) has also been
facilitating cooperation between the mayor and governor’s offices, and
the joint venture team.

“We are working hard to make sure the
decision-makers understand all the great qualities of our region,”
O’Brien said.

Brew City’s Charms

So
what is MillerCoors looking for in a host city?

“The issues with any
corporate headquarters location are recruiting and locating talent,”
said MMAC’s Sheehy. “They look at the city’s overall image, and things
like quality of life, housing prices, as well as arts and
entertainment, recreational opportunities, cost competitiveness and
access to air travel. That’s the normal basket of issues with any
corporate headquarters location. It’s a fair place to look at
what the joint venture team will be sorting out.”

Sheehy said
corporations have different needs, and the job of M7 is to match
Milwaukee’s strengths to corporate functions.

“Each company has a
different lens for looking at what is important to them,” Sheehy said.

One clue for what corporations look for in a host city is the description of Milwaukee found in Forbes Magazine’s 2007 list of most affordable cities. Milwaukee ranked No. 6, according to Forbes:

“Milwaukee
has a strong tradition of charitable giving and civic involvement; both
have helped create cultural institutions and fund the arts … The city
is 21st for its combination of museums, sports outlets, libraries,
universities and parks, though if access to good beer were a category,
there’s no doubt the city would perform even better. Cost of living
sits right about at the national average.”

What are
Milwaukee’s chances? Do we pass the MillerCoors taste test?

“It’s much
too early to tell,” Sheehy said. “If this were a football game, we’d be
coming to the coin toss right about now.”

John Gurda, historian and author of Miller Time, published
on the 150th anniversary of the company, sees good reasons to keep the
headquarters here, including “Milwaukee’s image as a beer capital and
the relative size of the two partners.”

But Gurda noted that
Miller hasn’t been locally controlled since 1966, and local concerns
may not factor as much as civic leaders would like.

“If the
headquarters were to move, the effect would be more psychological than
economic,” Gurda said. “Milwaukee would lose a significant
number of well-paying jobs, but the brewery would still make beer,
Miller Valley would look the same and Miller Park would still be Miller
Park.”

Locating in Chicago, another possibil- ity, “would put a
definite damper on any talk of cross-state cooperation,” Gurda said.

In
a way, this latest episode in Milwaukee’s brewing history brings us
full circle, to the days when area brewers relied on little more than
business sense to muscle their way into a national market.

Beer
historians (yes, there are such people) have long wondered if Milwaukee
made its brewers great, or if the brewers made Milwaukee great.

According to BeerHistory.com, Milwaukee didn’t enjoy any significant
advantages over other Great Lakes cities with cheap water
transportation and abundant ice in the winter. True, our German
heritage was a big plus, but in the end it was business acumen that put
the city on the map.

“Guys like Fred Pabst really were
exceptional businessmen,” Gurda said. “And the proximity of Chicago
helped.” And then there was the Chicago fire of 1871, which increased
demand for Milwaukee beer. According to BeerHistory.com, sales of
Schlitz doubled following the conflagration.

Meanwhile,
Milwaukee is hoping that its last flagship brewery can improve its own
fortunes, without an accompanying disaster. We’ll know more this summer
when the DOJ gives a thumbs up, or down, to the proposed joint venture.

Spends
around $500 million on products and services from Wisconsin businesses
each year. These businesseswhich include ingredients, equipment and
services for Millercreate an opportunity to place money back into the
community.

Produces
about 45 million barrels of beer every year. At capacity, the Milwaukee
Brewery can produce more than 10 million of those barrels annually.

Invested
more than $40 million in Miller Park and supports the state’s major
professional sports teams, including the Admirals, Brewers, Bucks and
Packers.

Contributes millions of dollars to economic
development and Milwaukee tourism. Miller helps to support the
Milwaukee County Zoo, Summerfest, the Wisconsin State Fair and many of
the city’s ethnic festivals.

Tags

Comments (2)

Miller moving its corporate headquarters would be ...

Miller moving its corporate headquarters would be a tremendous loss to Brew city. We would lose our last major brewery, a good corporate citizen, and thousands of well paying jobs that we CANNOT afford to lose.

The city, the county and the state should do everything possible to keep them here. Denver, Chicago and Dallas are trying everything to get them.

Anonymousmore than 10 years ago

It would be such a shame to see Miller leave Milwa...

It would be such a shame to see Miller leave Milwaukee behind..

Anonymousmore than 10 years ago

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